What I Learned After Spending Nearly $1,000,000 on Ads in 2016

2016 has been a fantastic year for performance marketing in general…and I must say opportunity is constantly presenting itself in this game! As I am about to close out the year with some holidays.. I want to share a bit of what I have learned after spending nearly a million on ads this year online. 

For those of you who might not know, I have been in the CPA affiliate game for over 10 years, but just recently left a full time job to join my many “full time affiliate” friends. This industry can be super tough, but when you find a winning campaign it makes it all worth it.

This year started out EXTREMELY well after spending over $400,000 on native ads in the first 4 months of the year. I will talk about native ads in a minute.

The rest of the year focussed mainly on Google Adwords, Facebook and at least 7 other traffic sources all with CPA affiliate offers and lead generation style campaigns.

What I have learned from all of this and why will 2017 be BIGGER AND BADDER….

NATIVE ADS…WILL I CONTINUE TO SPEND MONEY THERE?

Let’s talk about Native ads first. As I mentioned, at the start of the year I was spending nearly $100K a month just on native ads…if you want to see exactly what I spent all that money on then check out the course we did CPA DISPLAY ACADEMY. Inside that course I share the 4 main campaigns that totally dominated native ads for me this year. (There is also a great webinar in there showing the strategy)

Before I start this rant…I want to mention that this should not take away from the hard work some of my friends do at these native ad networks. While there are a ton of different types of native ads out there, I am focussing on the most common ones – the ones you see EVERYWHERE. 🙂

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Example of a Native Ad

While native ads can explode your traffic numbers there are many things that buyers need to consider. There are competing forces that I need to contend with that can make it difficult to optimize my ads for long term. First of all, most of these places where I buy native ads from use a technology that allows “publishers” or people with websites to place a code onto their website that will display ads. This is much different than buying ads from say Google or Facebook. My ads are shown on sites that these ad networks do not control, and in turn this opens me up to more click fraud and inconsistencies, or as I like to call it SHITTY traffic.

Here is what I mean…in 2016 the “Native Arbitrage method” has exploded in the industry, with thousands of people rushing to create very viral websites with viral stories, or just plain fake news. You might have seen this in the media lately where CNN is even bitching about fake news, but they actually have links to fake news on their front page…(WTF)

Anyway, what these “arbitragers” are doing is they are placing tons of advertisements onto their page such as adsense, banner ads, and you guessed it… native ad code that will show my ads if I buy traffic from a native ad traffic source. (Examples: Taboola, Content.ad, Revcontent, Spoutable etc…) Their method works (although it’s dying). Arbitragers buy super cheap clicks and when people arrive on their site, they are presented with a barrage of advertisements. Visitors are pretty much forced to click through multiple pages before they can get to the end of the article. This results in increased page views, which ultimately increases the chance of people clicking on another advertisement, resulting in a few cents or even a few dollars being paid to the site owner. Did you get all that?

Ok, so here is the shitty part about all of this. A shitload of traffic that I am buying is coming from these arbitrage sites. So first and foremost I have to spend alot of time weeding out the terrible sites from showing my ads. This is done using tracking software like CPV Lab that will collect the “site id or widget id” of every site my ad is shown on and will tell me which site converted. After weeks and tens of thousands of dollars spent…I might finally have a good list of high converting sites that I am laser targeting…woohoo let’s laugh all the way to the bank….right?….NOPE.

Just when you think all is fine and dandy, you start to notice some of those sites start to suck hard…but why?

Well without even considering competition at this point, there are many reasons these sites can start to suck. One big reason I think is because the arbitragers are testing traffic sources themselves to try and bring more traffic to their site. This means more people click on ads, and they make more money. The problem is the arbitragers don’t give a rats ass on how good or bad that traffic is as long as the people arriving on their site are clicking ads. (even if its by mistake)

So while I may have some great conversions for a long time on a site because they were buying Facebook traffic, the site owner may change his mind someday and start buying traffic from some low quality native ad traffic source that doesn’t screen any of the publishers. It’s no secret that there are a ton of native ad networks popping up that allow just about anyone to put ads on their websites…and this results in extremely terrible traffic, and in some cases completely fake traffic.

ad-fraud-robotSadly to say I thought by now ad networks would have a more robust system in place to protect us buyers from the rampant and growing problem of fake traffic bots, ad fraud or whatever you want to call it. I mean just look at the latest story on Wall street about the Russian hackers, where they say these hackers “elevate ad fraud to a whole new level of sophistication and scale”

While there is work being done to combat some ad fraud, it seems we are getting absolutely nowhere.

But does all this mean I am going to stop buying native ad traffic in 2017? HELL no….

I know I am probably padding up somone’s bank account in some obscure country somewhere every time I buy an ad, but I guess that’s just the price I gotta pay…cause as long as my bottom line is profiting I will buy traffic. I mean yeah it REALLY sucks that this still happens, but I can’t lose sleep over it.

So what is going to change for me this year in native ads? 

Well I am going to spend less on testing native ad traffic that is for sure. I am really getting sick of all the ad networks telling me I have to spend 5- 10K just to get some data. Why the hell would I do that now, especially when I KNOW about all that shit traffic that runs through your networks that you are trying to sell me.

By now you networks should have enough data to know which sites in your network are absolute bullshit, and you should be taking them off your list before you tell me to test $10K.

Why should I be the one blowing thousands of dollars proving what you already know, when I can just go to Facebook and laser target my audience? Please talk some sense into me. I know I am just a pebble…in the grand scheme of things, I mean why in the world you ever consider just giving me the data so I can start spending hundreds of thousands on real traffic….

Now before I get in shit for this preceding rant from some of my peers at these ad networks, let me just say that some of you are fantastic! You help me, you give me data, and you tell me where and where not to spend money. For that I REALLY appreciate you, and you know EXACTLY who you are. THANK YOU. 

So as a recap on native ads, yes I will continue to spend there, but I am much more aware now that the traffic is just being tossed around like a hot potato, between ad networks all day, and I am much more aware of the rampant ad bots. So you ad execs out there, stop pitching to me the “you need to spend $10K for data” pitch…cause there are many other places to buy traffic and it seems your competition is only getting bigger and bigger.

In the grand scheme I think internet users are getting much smarter and can see this whole scheme for what it is…and pretty damn sure in the coming years all this “news” and fake news is gonna be much less lucrative, and we will all be looking back at this like it was the wild west…some of us will miss it, and some of us will likely be recalling the “good ole” days. 🙂

My Year with a great friend…GOOGLE ADWORDS. Here is what I have to say about you…

Google I don’t care what anyone says about you…I love you.

download-1Speaking of the “wild west” . My friend Google do you remember when you nearly wiped out an entire planet of affiliate marketers? That was a site to see. (pun intended). I was only new in the game but I have learned a lot since then. I learned how to legitimately run affiliate campaigns on Google adwords. 🙂 I will never be one for SEO, but adwords yes.

Now I admit…I might have cheated a bit and spent some money on Bing this year, but Bing was never the true friend like you are. Although I had a lot of great times at Bing, the volume and scale was always lacking. Bing is definitely a great place, and I have done extremely well with CPA there.

Now I must say Google Adwords has proven to be one of the most consistent traffic sources. It’s one of those set and forget places. I like that. The main thing I have learned is that increasing the budget too sporadically can decrease the conversion rate, and I am going to spend 2017 learning more ways to scale on Google without just increasing the budget.

I have also learned that using their auto bidding tool to optimize for conversions will only result in me spending way more money than I need too. Lastly I have also learned that they have put a lot of time and effort to improving their customer support and users can now get dedicated account managers.

I have actually learned a lot from my account manager there, but one thing I will caution is that the account managers obviously have a job to get you to spend more money. Of the 3 or 4 times I took the advice from my account managers I had lost more money and spent more. So while they can be great people to talk to, and I can sometimes sleep well at night thinking I might have an “insider” at Google, I don’t take their advice at face value…I proceed with caution.

So will I continue to buy traffic from Google in 2017? You’re DAMN RIGHT… We will also be releasing more specific courses on affiliate campaign ideas for Google Adwords inside the Powerhouse Premium membership this year.

Ah Facebook…you have made so many of my friends RICH.

facebookAs a result of all the shit going on in the last 3 years with Facebook there is a new buzzword working its way around all the CPA networks…and that buzzword is……..wait for it…..

Facebook Friendly Offers

Doesn’t that make you feel all warm and fuzzy? For the most part ecommerce and straight sale offers are starting to become the trend. I mean there is definitely much more to it…but what I have learned this year is that Facebook is a beast and makes people rich. Duh…ok it doesn’t take a genius to figure that out.

I admit that 2-4 years ago I spent a lot of my time buying ads on Facebook that today would likely not be allowed anymore. It was nothing really fishy, but Facebook has tightened up, and massive account bans are a real thing. So as I end out this year I have focussed more time on finding facebook compliant ad campaigns. The fact is there really are a ton of compliant offers out there that can be run on Facebook.

Stick to what you are good at…don’t try to become a “Jack of All Trades” like I did…

One thing that I see happening more and more, (and this may scare affiliate networks) is that the bigger affiliates are starting to shift towards building out their own offers and protecting themselves from not being paid! Be-bye advertisers who don’t pay, and be-bye networks who pass that loss onto the affiliates…

I have tried building offers myself, and in 2016 I built 4 offers. If you think it’s that easy you are completely false, which is why I went from owning 4 offers to only one. I own one offer and believe me, if you are good at affiliate marketing, stick to being an affiliate and find an advertiser you can trust. That is the biggest lesson I learned this year.

hqdefaultI spent so much time this year trying to “protect my empire” by building offers that I had absolutely no experience in, where I could have spent that time partnering with someone who knows their shit about CRMs, Customer support, fulfillment, processing, product creation, manufacturing, risk management, legal and the list goes on…and on.

If you know traffic, stick to traffic, and find a partner or network you can trust. Meanwhile this year I spent tens of thousands in building out products that lacked a real solid business foundation…I could have spent all that money on traffic and made WAY more money…and had less headaches.

This problem is going to continue to plague affiliates who think they can just build their own products and run with it…especially since there is a SURGE of people out their selling courses on how to start a Shopify or Woo-commerce empire. TRUST ME – it’s not that easy. If you want to make sick money ask 80% of my Facebook friends in the industry how they did it…and they will likely tell you to stick to being an affiliate. (the other 20% are probably drunk in Vegas.)

I understand that many affiliates don’t see the long term vision of affiliate marketing, and that at the end of the day they want to “own” something. I struggled with this myself, but I have learned new ways to build out affiliate campaigns so that in the end I still own something. That something is a massive email list. While some advertisers will struggle constantly with processing, legal battles and product fulfillment, my list will always be actively ready for whatever affiliate offer I want to pitch their way.

Bad Deals, Shady Deadbeats, and Advertisers Who Don’t Pay

deal-business-catI am going to talk briefly about how many times I got screwed over this year…in bad deals, shady advertisers, and people who don’t pay. (Don’t worry idiots I won’t expose your name and business in this post)

If anything I have learned that the industry has its idiots…and many of us deal with the same idiots.

If you think the idiots can only be the networks then you are wrong. The networks I work with are fantastic and up front and pay ALWAYS.

I have learned in a few bad deals, that everyone involved in the chain from the moment a product is created, to the moment an affiliate gets paid is a potential idiot. I have been screwed by advertisers who don’t pay, networks who don’t pay because advertisers didn’t pay them, I have been screwed by shady terms in agreements that make me pay for things that I shouldn’t have to pay for, I have entered into risky deals that I never should have been part of, and I trusted people when I should have told them to f$%@ off in the first place. Yes, I know I am part to blame, and in the end I am the one who needs to do more due diligence when deciding who I work with.

No matter what level you are, you can stand to get screwed by the wrong people. The online performance marketing industry is full of scammers….but they are only a fraction of the people in this game. The truth is the majority of us are real people who want to work together to build real businesses that last…and we have feelings…(ah there’s that warm fuzzy shit again)…..

Be vigilant, read the fine print every time, and join active Facebook groups to know who is really the REAL DEAL.

So What is 2017 Going to Look Like?

There is a lot on the plate for 2017 and I am very pumped to get things going! Definitely going to continue building new campaigns and share insights inside the private affiliate forum, and going to continue building mail lists when the opportunity presents itself. Facebook traffic is going to be a major focus in the first quarter.

We have hired 2 more people to help enhance our affiliate training program even more inside the premium members area, and starting in January we will be sharing more ideas on how to build highly effective online marketing campaigns. We plan to highlight a new campaign strategy every 2 weeks and share it with our members for discussions. This is in addition to the already existing businesses in a box, and premium training content inside.

We have been also considering starting a private and highly selective Mastermind Skype group for weekly discussions. There are many pros and cons for this we are considering first, but in the end I think Mastermind skype group CAN be very helpful for talking strategy.

Well it’s December 23rd…and it’s time to wrap, drink a few glasses, and spend some time with friends and family.

See you in January!

 

Powerhouse Affiliate

Powerhouse Affiliate

Affiliate, Media Buyer, Trainer at Powerhouse Affiliate
Hi I am Joey Babineau. I help others make more money online. I have been an online entrepreneur for over 15 years and specialize mainly in CPA marketing and media buying. This is my blog where I, (and some members of my team) will post about the industry. Our posts are aimed to help you but the content does sometimes contain links to my premium affiliate training and other products which will benefit me financially should you choose to purchase them - just so you know, and that we are in full disclosure.
Powerhouse Affiliate

About the Author

Powerhouse Affiliate
Hi I am Joey Babineau. I help others make more money online. I have been an online entrepreneur for over 15 years and specialize mainly in CPA marketing and media buying. This is my blog where I, (and some members of my team) will post about the industry. Our posts are aimed to help you but the content does sometimes contain links to my premium affiliate training and other products which will benefit me financially should you choose to purchase them - just so you know, and that we are in full disclosure.

1 Comment on "What I Learned After Spending Nearly $1,000,000 on Ads in 2016"

  1. Great post. We have just started scaling in display advertising and are a bit nervous about click fraud. Appreciate the insights into Ad Networks.

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